Correlation Between UPDATE SOFTWARE and Swire Properties

Can any of the company-specific risk be diversified away by investing in both UPDATE SOFTWARE and Swire Properties at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UPDATE SOFTWARE and Swire Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UPDATE SOFTWARE and Swire Properties Limited, you can compare the effects of market volatilities on UPDATE SOFTWARE and Swire Properties and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UPDATE SOFTWARE with a short position of Swire Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of UPDATE SOFTWARE and Swire Properties.

Diversification Opportunities for UPDATE SOFTWARE and Swire Properties

-0.72

Correlation Coefficient

UPDATE SOFTWARE  Swire Properties

Pay attention - limited upside

The 3 months correlation between UPDATE and Swire is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding UPDATE SOFTWARE and Swire Properties Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Properties and UPDATE SOFTWARE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UPDATE SOFTWARE are associated (or correlated) with Swire Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Properties has no effect on the direction of UPDATE SOFTWARE i.e., UPDATE SOFTWARE and Swire Properties go up and down completely randomly.

Pair Corralation between UPDATE SOFTWARE and Swire Properties

Assuming the 90 days trading horizon UPDATE SOFTWARE is expected to generate 13.58 times less return on investment than Swire Properties. In addition to that, UPDATE SOFTWARE is 1.7 times more volatile than Swire Properties Limited. It trades about 0.01 of its total potential returns per unit of risk. Swire Properties Limited is currently generating about 0.16 per unit of volatility. If you would invest  185.00  in Swire Properties Limited on April 25, 2025 and sell it today you would earn a total of  33.00  from holding Swire Properties Limited or generate 17.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

UPDATE SOFTWARE  vs.  Swire Properties Limited

UPDATE SOFTWARE

Risk-Adjusted Performance

Very Weak

Over the last 90 days UPDATE SOFTWARE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, UPDATE SOFTWARE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Swire Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Swire Properties Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Swire Properties reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UPDATE SOFTWARE and Swire Properties

The main advantage of trading using opposite UPDATE SOFTWARE and Swire Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UPDATE SOFTWARE position performs unexpectedly, Swire Properties can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Swire Properties will offset losses from the drop in Swire Properties' long position.

The idea behind UPDATE SOFTWARE and Swire Properties Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.